Hunza braces for transformation

By Marina Emmanuel

Published: 2010/12/10

From Malaysian forum SSC

THE completion of a lifestyle shopping mall along with an office tower by 2012 is set to transform Hunza Properties Bhd (HPB) (5018) from a property developer to that of a real estate landlord.

The Penang-based company, which is due to announce two new anchor tenants for its Gurney Paragon retail development next week, has no plans to sell the mall.

"We will instead hold and manage this mall. We believe that the consistent income stream from the mall will enable the group to have a strong base of recurring income," HPB executive chairman Datuk Khor Teng Tong told reporters after a shareholders' meeting yesterday.

Apart from the 8-storey mall and 10-storey office block, Khor said the project's 700,000 sq ft net lettable area will include a podium, along with the sea-fronting former St Joseph's Novitiate building in Pulau Tikus.
St Joseph's Novitiate and a chapel inside is a heritage building on the grounds of the project, which is bordered to the north by Gurney Drive and south by Kelawai Road.

The 94-year-old building, which is touted by many as a heritage masterpiece and is being conserved by HPB, is set to be transformed to a space which will house boutique retailers and restaurants.

HPB bought the 4ha freehold site in 2004 for an integrated project which will include two condominium blocks with a development value of RM450 million.

The residential component of the project, which boasts an average RM700 per sq ft, is currently 85 per cent completed and the company expects to have vacant possession by April next year.

Khor yesterday announced that HPB had recorded its highest ever net profit of RM50.9 million for the 2010 fiscal year ended June 30. This compared with RM27.6 million in 2009.

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Nice move.

Space for smaller property players

Space for smaller property players

Written by Chua Sue-Ann

Wednesday, 08 December 2010 11:57

KUALA LUMPUR: Amid the large mergers taking place in the property industry, smaller players believe there is still space for niche property developers.

The recently announced mergers of six big property developers to create three enlarged entities will invariably change the Malaysian property scene.

In November, the property industry was jolted by the news of three proposed mergers as developers race to become bigger.

UEM Land Holdings Bhd got the ball rolling with the proposed takeover of Sunrise Bhd. With a combined market capitalisation of nearly RM10 billion and a landbank of over 12,000 acres, it will create the country’s largest property company by market capitalisation.

Shortly after, IJM Land Bhd and Malaysian Resources Corp Bhd (MRCB) announced plans for a marriage that will make the new entity the second largest, with a market capitalisation of about RM7.2 billion and over 9,000 acres of land.

Then Sunway Group’s Tan Sri Jeffrey Cheah and his daughter Sarena proposed to merge Sunway Holdings Bhd and Sunway City Bhd into a single entity, which will have a market capitalisation of RM3.3 billion and over 2,000 acres of land.

Being big has its advantages, as the players in the three merger exercises note. They include access to cheaper funding, increased investor interest and better economies of scale.

In the old landscape, two large players — S P Setia Bhd and UEM Land — stood out among many mid-tier companies. Even then, only S P Setia managed to garner substantial foreign investor interest, fetching premium valuations. By comparison, most property stocks traded below book value.

With the changing landscape, there will be four large players — UEM Land-Sunrise (market cap: RM10 billion), IJM Land-MRCB (RM7.2 billion), S P Setia (RM5.2 billion) and the merged Sunway (RM3.5 billion).

The three largest players will have price-to-book ratios of over two times, and price-to-earnings ratios of well over 20 times, which could set a new benchmark pricing for the sector.

Can the smaller players still hold their own and occupy strategic niches in the market post-merger?

Eric Chan, executive director of Eastern & Oriental Bhd (E&O), said there will still be a need for small property developers with a strong brand.

“There is definitely room for smaller, niche players. We can move faster, we have less red tape to deal with, we can have faster turnaround for our projects,” said Datuk Fateh Iskandar Mohamed Mansor, Glomac Bhd’s group managing director and CEO .

Tan Sri Leong Hoy Kum, Mah Sing Bhd’s managing director and group chief executive, said, despite the bigger merged entities’ stronger balance sheets there would still be room for niche players with a focus on their own strengths.

With a market capitalisation of RM1.5 billion, Mah Sing will rank among the top ten largest developers in the new pecking order. E&O and Glomac have smaller market capitalisation of RM940.6 million and RM505.2 million, respectively.

Interestingly, all three companies have also evolved into their current form from quite different entities, either through mergers and acquisitions, or diversification exercises.

Within the last decade, Mah Sing has evolved from being a successful plastics manufacturing company into a far more successful property developer, led by Leong, its entrepreneurial CEO and founder.

Meanwhile, E&O has a corporate history as colourful as the hotel it is named after, and is no stranger to mergers and acquisitions.

Helmed by low-profile businessman Datuk Terry Tham Ka Hon, E&O most recently conducted a Sunway-like merger exercise in 2008. Back then, E&O privatised its listed subsidiary, E&O Property Development Bhd (E&O Prop) into a single larger entity. That wasn’t the first privatisation attempt — a general offer exercise in 2005 saw E&O increasing its stake in E&O Prop, but not enough to privatise the company.

Glomac was listed in 2000, but its history started in 1988 when two entrepreneurs, Tan Sri FD Mansor and Datuk Richard Fong, joined forces to start a property development company.

Today, Glomac is recognised as a successful niche developer with a landbank of 900 acres. It continues to be run by the two founders, together with FD Mansor’s son, managing director Fateh. Glomac also holds the distinction of having sold the most expensive office space in downtown Kuala Lumpur. Menara Glomac, next to the KLCC Petronas twin towers, was sold for a record RM1,120 psf at the end of 2007, just before the financial crisis.


This article appeared in The Edge Financial Daily, December 8, 2010.

Leader and Mahsing

Mahsing shows some growth in 3rd quarter earning, and more good news from this company is expected in ear future. Leader also recovering from downturn in their earning since 2008/09. Second and third quarter posted a solid growth. As usual, earning from power generation command a good margin. Bought Mahsing 1.78 and Leader 0.835 and 0.83. Ok, no more money for Leader. All left for vacation. *

Mahsing..another landbanking activity

Another landbanking activity..boy ...the have a lots of idea to develop a land. Hope they have enough hand to hand all the projects

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Mah Sing buys land for RM157.3m

Uptrend Housing Development Sdn Bhd, a wholly-owned unit of Mah Sing Group Bhd, has acquired 24.41 hectares of freehold land in Batu Feringgi, Penang, for RM157.3 million in cash.

In a statement here today, Mah Sing said the land would be developed into a resort-style project named, Feringgi Residence@Penang, with an estimated gross development value of RM800 million. - Bernama

HUNZA Property

TP for this company

CIMB - 1.93

K&N - 1.76

OSK - 3.08 (Damn..OSK always with high TP)

My Target ~RM2.00. Hope not too optimistic. :p

Healthy balance sheet, low gearing, PE less 6, trading below NTA and BV!

Reminds me of Mahsing few years back.

Btw, I like their Gurney Paragon project, ncely design, would be perfect if they could match ION Orchard....

but looking forward for it.

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Latest research from CIMB

• Broadly in line; maintain OUTPERFORM. Hunza Properties’ annualised

1QFY6/11 core net profit, which excludes RM22.7m revaluation gains, came in

within consensus estimates but was 6% above our projection. However, we regard it

as being broadly in line with expectations given the relatively volatile nature of

property sales. We are, therefore, keeping our EPS estimates. As expected, no

dividends were declared for the quarter. In the absence of any earnings revision,

our target price stays at RM1.93, still pegged to a 40% discount to its FD RNAV.

The stock remains an OUTPERFORM given the potential catalysts of 1) stronger

property sales, 2) better-than-expected construction progress, and 3) increasing

investor interest in the Penang property market.

• Net profits lifted by revaluation gains. 1QFY11 revenue rose 13% yoy, thanks to

the completion of Infinity and stronger progress billings for Gurney Paragon. But net

profit jumped 173% yoy, boosted by RM22.7m revaluation gains for its Gurney

Paragon mall. Recall that under FRS140, investment properties are to be revalued

at regular intervals of at least once every year. Excluding the revaluation gains, core

net profit was relatively flat as EBITDA margins contracted by about 4.6% pts due to

higher operating costs.

• Slower sales in 1Q. Hunza Prop raked in RM24m worth of sales in 1Q11, 38% less

than 1QFY10’s RM39m and 11% less than 4QFY09’s RM27m (Figure 1). The takeup

rate for Infinity has risen to 92% at end-Sep 10 from 87% as at end-June 10

while Gurney Paragon’s take-up has inched up just 1% pt to 64%. The group’s total

unbilled sales stand at RM82m compared with RM103m at end-June 10.

• Sales to take off when construction of mall gains traction? The take-up rate for

Gurney Paragon is somewhat slow but should pick up in FY12 when buyers are

more confident about the progress of the mall’s construction. The priority now

seems to be the smooth construction and completion of the Gurney Paragon mall by

end-CY12. The group has completed piling works for the mall and is now

constructing the basement.

Latest Portfolio

OMG...it has been a looonnng time. Theres nothing interesting to write about my portfolio.

Anyway, latest portfolio

Mahsing 1.48

Leader 0.795

Alam 1.05

Hunza 1.42

CMMT 1.08

Bonia 1.32

Still believe that our market still has room to run. will hold

Mah Sing may gear up RM1b war chest

Published: 2010/02/22

Mah Sing Group Bhd, a Malaysian developer, may gear up to build a RM1 billion war chest for acquiring land to capitalise on an expected rebound in the Malaysian property market, group managing director Leong Hoy Kum said in a statement today.

“We believe that developers like us with sufficient cash and a healthy balance sheet will continue to grow stronger,” Leong said, in a statement accompanying the company’s fourth-quarter results.

Mah Sing had RM400 million in cash and zero net gearing at the end of December. “Should we gear up to 0.5 times, we can build a war chest of approximately 1 billion ringgit to purchase good prime land that suits our business model,” Leong said in the statement. -- Bloomberg

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Company Name	:	MAH SING GROUP BERHAD
Stock Name	:	MAHSING
Date Announced	:	22/02/2010

Type	:	Announcement
Subject	:	MAH SING GROUP BERHAD (“MAH SING” OR “COMPANY”) PROPOSED BONUS ISSUE OF UP TO 151,283,859 NEW ORDINARY SHARES OF RM0.50 EACH IN MAH SING (“MAH SING SHARE(S)”), TO BE CREDITED AS FULLY PAID-UP, ON THE BASIS OF ONE (1) NEW MAH SING SHARE FOR EVERY FIVE (5) EXISTING MAH SING SHARES HELD, ON AN ENTITLEMENT DATE TO BE DETERMINED AND ANNOUNCED LATER (“PROPOSED BONUS ISSUE”)
Contents		Further to the announcement dated 28 October 2009, HwangDBS Investment Bank Berhad, on behalf of the Board of Directors of Mah Sing, wishes to announce that the listing application to Bursa Malaysia Securities Berhad for the Proposed Bonus Issue has been submitted today. This announcement is dated 22 February 2010.

Bought KELADI

I bought keladi maju 0.15 today. Balance sheet is strong and net profit also improving. This company selling below its NTA and book value price, sitting on net cash and paying a good dividend.

SCOMI MARINE AND MAHSING

I bought Scomi Marine 0.38 last monday and mah sing 1.77 yesterday.
Both companies fundamentaly strong and very confortable to invest in. Since i have no time to monitor market daiy, i think it is a safe bet as i dont need to monitor them everyday. Praying hard now!

Understanding capital terms

Saturday November 7, 2009

By FINTAN NG

There is always an element of risk where investing is concerned. It is just a matter of whether people take the time to read the fine print and understand the risks they are exposed to when they invest.

Most investors in financial products would have come across the terms “capital guaranteed fund” and “capital protected fund”, but whether they understand these terms well is another matter, even if these terms are explained in the prospectus.

Basically, a capital guaranteed fund is a fund where the investor’s principal is fully protected. The fund usually invests most of the money in low-risk instruments such as government bonds, with only a small amount in riskier assets. Consequently, the returns are lower.

In a capital protected fund, the protection may involve a variety of instruments, the performance of which will determine whether investors retain, lose some or all of the principal amount invested.

In many instances, capital protected products have been sold to investors, with the impression – perhaps unintentionally – that they will not lose the principal sum at maturity.

However, the fine print will inform the investor on how the banks or other financial institutions intend to protect the sum invested. In the years before the global financial crisis, this usually involve securities known as options, swaps or collateralised debt obligations (CDOs).

Unfortunately, many investors, including seasoned ones, do not understand the risks involved when such assets are used to securitise their investments.

There are those who cannot even differentiate between capital guaranteed and capital protected.

We now know that CDOs, especially those with asset-backed securities linked to subprime mortgages, were among the chief culprits in the collapse of the US financial system.

The stark reminder of what can happen when people invest their money with only half an understanding of the risks involved, hit closer to home when the financial crisis peaked more than a year ago with the bankruptcy of Lehman Brothers Holdings Inc, which also saw the near collapse of insurer American International Group Inc.

Among those affected were investors in Hong Kong and Singapore, who invested in the Lehman minibonds, which were first issued in 2002. Investors of Singapore-based DBS Group Holdings Ltd’s “high notes” as well as Merrill Lynch & Co’s “jubilee notes” were also affected.

These people invested in what is known as structured deposits or structured notes, which were capital protected not capital guaranteed.

Anecdotal evidence gleaned from news reports from last year show that often these investors do not understand what they were investing in or have been misled into believing that they had invested in risk-free products.

Most of them, whose demonstrations outside the banks were captured on television, saw a significant part of their life’s savings evaporate in the wake of the financial crisis.

One consequence of the massive losses incurred by investors last year was the banning of the term “capital protected” by the Monetary Authority of Singapore (MAS).

In a statement in early September, MAS said the ban on the term would apply to mass-market products familiar to retail investors, including structured notes, unit trusts and investment-linked life insurance policies.

According to Singapore’s Straits Times, financial institutions in Singapore now have to provide customers with simple, user-friendly ‘product highlights sheets’ and providing ‘health warnings’ on complex investments in appropriately large font.

There are those who will also post the question of how sound the financial institution providing the guarantee for capital guaranteed products are, especially since the financial services industry have seen so many banks get in trouble or go bust between July 2007 (when the subprime crisis began) and now.

One way to find out is to look at the credit rating and balance sheet of these guarantors, which are usually public information.

Otherwise, information on the guarantors are also available on the prospectus of the fund.

A website on investment education had this to say about capital guaranteed funds: “When we invest with little or no risk, we pay for it by compromising on potential returns.”